Creditors and debt collectors typically have one goal: to get as much of your money in hand as they can, and as quickly as possible. Unfortunately, that often means they may be careless in crossing the line to get you to pay up. Many people who are struggling with debt are intimidated when debt collectors pour on the pressure.
Unfortunately, the worst collectors will play on that.
It’s easy to make mistakes when you’re nervous, under pressure, and don’t fully understand your rights. That’s why it’s important to know about the laws that protect you and the limits they place on debt collectors.
Of course, many different state and federal statutes address consumer finance and the collection process. The best source of information about specific violations is always an experienced consumer financial protection attorney. That’s why DebtCleanse includes unlimited monthly strategy sessions with an attorney in every membership.
This overview of some of the most powerful consumer financial protection laws will help you understand the type of protections available and when you should seek help to fight back.
Fair Debt Collection Practices Act (FDCPA)
The federal Fair Debt Collection Practices Act was created to protect people from debt collectors who lie, threaten, and otherwise harass or abuse consumers. The FDCPA only applies to third party collectors like collection agencies and debt buyers, not original creditors. But, the protections are wide ranging. Debt collectors who cross the line may be liable for money damages and have to pay your attorney fees.
You’ll find more detailed information in our FDCPA post, but some of the key protections include:
- A prohibition on misrepresenting the status of a debt
- The requirement that debt collectors inform you of your right to dispute
- A halt to collection activities while a timely dispute is under investigation
- Limitations on when and how frequently debt collectors can call
- Restrictions on calling you at work and contacting third parties
Fair Credit Reporting Act (FCRA)
The Fair Credit Reporting Act is another powerful federal statute. The FCRA imposes certain obligations on both credit reporting agencies and those who report to them. The law establishes a dispute process and requires the credit reporting agencies–including TransUnion, Equifax and Experian–to investigate disputes and correct or delete any inaccurate information.
Creditors and debt collectors must not make inaccurate reports about balances and payment history. They also cannot continue to report debt that is too old, or report debt discharged in bankruptcy as outstanding.
Both creditors/debt collectors and the credit reporting agencies can be liable for damages if they fail to fulfill their obligations. They may also be required to pay your attorney fees. To learn more, check out our FCRA post.
Telephone Consumer Protection Act (TCPA)
Most people have at least heard of the FDCPA and the FCRA, but the TCPA isn’t quite as well known. The law was originally intended in large part to protect consumers from being bombarded with telemarketing calls. But, the statute also imposed strict limitations on collection calls to a consumer’s cell phone. Auto-dialed calls and pre-recorded messages to mobile phones are generally prohibited unless the consumer has given permission.
The TCPA doesn’t provide for attorney fees as many other consumer protection statutes do. But, the potential damages can be significant if the collector has placed repeated calls over time. Because damages are unpredictable, a TCPA claim involving many calls may create significant bargaining power in addressing the underlying debt.
Read more about the TCPA.
Real Estate Settlement Procedures Act (RESPA)
RESPA provides some powerful tools for those who have fallen behind on mortgage debt, believe there is a discrepancy in their mortgage loan account, or are facing foreclosure. A key provision is the qualified written request, or QWR. These requests are often used to obtain detailed information from a mortgage servicer. These detailed records may reveal misapplication of payments, unauthorized fees, and contradictions within the servicer’s records.
Effective use of QWRs is complicated, and is best undertaken with the help of a qualified consumer financial protection attorney. A successful claim may result in monetary damages and attorney fees. And, QWR responses may provide information and leverage that can help fight foreclosure.
Putting Consumer Protection Laws to Work for You
This is just a sample of the many statutes that protect consumers in debt collection and other financial matters. Unfortunately, most people don’t have a thorough knowledge of consumer protection law. So, they don’t recognize violations that could lead to money damages, or could provide powerful leverage to resolve the underlying debt.
That’s where DebtCleanse comes in. Our membership offers unlimited sessions with an attorney to help identify possible violations and how they can benefit you. Experience the power of having a knowledgeable attorney on your side – register now.